What Tax Reform legislation means – and doesn’t mean

March 9, 2011

Dear Constituents:

I want to clarify what led to the introduction of House Bill 385, what it means and what it does not mean.

In 2010, the Georgia General Assembly passed HB 1405, creating a citizen-led tax council to make recommendations to the legislature on possible changes to tax laws that would make Georgia more jobs friendly.  HB 1405 required the legislature to introduce legislation comprising all of the council’s recommendations.  The bill does not require the legislature to pass legislation that comprises all or some or any of the council’s recommendations.

HB 385 is the product of the requirements spelled out in HB 1405.

Legislation pertaining to taxes must originate in the House, not in the Senate, according to the state constitution. This explains why HB 385is a house bill.

The bill, as written, is tax neutral and would result in a one-third to one-half reduction in the state income tax rate in exchange for levying the state sales tax on some services and eliminating certain sales tax exemptions.

I expect that many of the tax council’s recommendations will not remain in HB 385 when, or if, it is passed.  Remember – the requirement was that the legislation as introduced would contain all recommendations.

I certainly do not foresee repeal of the state sales tax exemption on Girl Scout cookies or imposition of the state sales tax on veterinary services just to make a couple.

I am sure, though, that the final bill, if it is ever passed, will continue to be tax neutral and that the final product will make Georgia more jobs friendly.  Some of the proposals submitted by the council are worthy of consideration while others are non-starters.

I will continue to push for low taxes and a “flatter tax” system that will encourage businesses to locate, expand and thrive in Georgia.  Jobs are the best stimulus for the economy, not government spending or subsidies.

Below, please see a commentary from the Georgia Public Policy Foundation, the only free market and conservative think tank in Georgia, that provides further information.

Let me be clear, I do not support increasing the overall tax burden on Georgians.

Best Regards, Jan Jones